Uniform Guidance Rewrite Part 3: Procurement Updates

On April 4, 2024, the Office of Management and Budget (OMB) issued final changes to 2 CFR 200, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” (Uniform Guidance). The Uniform Guidance sets forth the administrative requirements, cost principles, and audit requirements for federal awards to nonfederal entities. The final changes follow OMB’s proposed revision from fall 2023 and a subsequent public comment period. The changes will take effect on October 1, 2024.  

See our previous posts for additional information on the rewrite: “Uniform Guidance Rewrite Part 1: Overview,” and “Uniform Guidance Rewrite Part 2: Increase of De Minimis Rate.” 

The rewrite updates procurement thresholds and approval requirements in an effort to enhance federal financial assistance management, transparency, and oversight. Key updates include the increased threshold for fixed-amount subawards, removal of the written approval requirement for specific cost items, and increased equipment management and disposal threshold. 

Increased threshold for fixed-amount subawards (Section 200.333) 

The Simplified Acquisition Threshold increased from $250,000 to $500,000. As a result, recipients will gain flexibility in their budgeting and programmatic decision-making processes with respect to the procurement of subawardees under fixed-amount agreements. 

Removal of prior written approval requirement for select cost items (Section 200.407) 

The OMB removed the written approval requirement for cost items including direct costs, entertainment costs, memberships, participant support costs, selling and marketing costs, and taxes. While this change eliminates the administrative burden of obtaining prior written approval, recipients should remember that all costs still must adhere to the cost principles to be deemed allowable. 

Increased equipment threshold (Section 200.313) 

The OMB increased the equipment threshold from $5,000 to $10,000. Equipment valued at $10,000 or less may be used, managed, or disposed of without any additional responsibility to the agency. This change is intended to reduce the administrative burden for recipients and agencies.  

To align the guidance with existing state requirements, the update allows Indian Tribes to dispose of equipment in accordance with tribal law. However, this change applies to Indian tribes if they do not have their own procedures for the use, management, and disposal of equipment. 

How BRG can help 

BRG’s Government Contracts and Grants Advisory practice provides a wide range of advisory services to companies, nongovernmental organizations, and not-for-profit organizations that provide mission-driven services under federally funded grants, contracts, or cooperative agreements. These organizations face a unique challenge to balance the need for compliant practices with limited budgets and resources. Many of our clients have a broad geographic footprint and are faced with additional complexities and risks associated with decentralized field office operations.